All of the Following Are Correct Statements About the Cost-Plus

question 100

Multiple Choice

All of the following are correct statements about the cost-plus pricing approach except that it

• A) is simple to compute.
• B) considers customer demand.
• C) includes only variable costs in the cost base.
• D) will only work when the company sells the quantity it budgeted.

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Definitions:

Expenses

Costs incurred in the operation of a business that are not directly tied to the production of goods or services but are necessary for the business's functioning and profitability.

Nature

The inherent qualities or characteristics of something; in accounting, it may relate to the types of expenses or incomes.

Function

In mathematics, a relationship or expression involving one or more variables.

Gross Profit Margin

A financial metric that represents the percentage of revenue that exceeds the cost of goods sold, indicating the efficiency of production.